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Investors sue? Really? So basically, I want to drink the koolaid but god damn you if it makes me sick... You should not be allowed to sue as a method to corre

Investors sue? Really? So basically, I want to drink the koolaid but god damn you if it makes me sick... You should not be allowed to sue as a method to correct your own stupidity.

jerf 15y ago
In general, I'd agree. However, many previous articles on HN have been about how Groupon has engaged in some shady accounting practices to get to where it is. It may be enough to make this exceptional enough that the investors have some "real" (for suitable definitions) grounds for complaint.
jetti 15y ago
It appears that the reason they are suing is because the 4th quarter results were posted and then based on that information people bought up the stock and then Groupon came back and said "Ya...about that information. We made a mistake" and the real results were much worse than they originally said, which makes the stock price drop. I think it is a valid approach because a company should be able to get its own accounting correct. However, based on the creative accounting from Groupon (and other issues) I'm really surprised the FTC allowed them to have an IPO to begin with.
- run4yourlives 15y ago
  Groupon's claims were so outlandish that a layman could have figured they weren't up to snuff. At some point, personal responsibility for your own investments is part of the risk.
  - ceejayoz 15y ago
    > Groupon's claims were so outlandish that a layman could have figured they weren't up to snuff. If that's the case, it's pretty clear-cut fraud, which supports the lawsuit argument even more.
zecho 15y ago
I think in this case it makes sense. Groupon restated a sharp drop in their reported revenues over three years. People don't necessarily invest in things they think are particularly good business models. They invest in things that are undervalued. If you looked at the revenue/price and thought it was undervalued and then Groupon changed 3 years worth of data on your after you made a stock purchase, you'd sue too. Just look at these reductions. They're more than just a minor correction from Groupon: - For 2008, revenue was reduced to $5,000, from $94,000. - For 2009, revenue was reduced to $14.54 million, from $30.47 million. - For 2010, revenue was reduced to $312.9 million, from $713.4 million.
- run4yourlives 15y ago
  People don't necessarily invest in things they think are particularly good business models. If you can't figure out the business model generating the reported millions, it's your own fault for thinking those millions are undervalued. How many of these investors didn't actually care about the value of the stock, so long as there was somebody around tomorrow that would buy it for more? Sorry, but I have no sympathy when you willingly play the game and then get burned by the same things you intended to inflict on someone else.
  - ceejayoz 15y ago
    > If you can't figure out the business model generating the reported millions... How, exactly, would I figure out that Groupon was lying/mistaken in their financials?
  - prodigal_erik 15y ago
    I'm not entitled to lie to investors just because they should be smart enough to disbelieve me. There's a point beyond which it's not feasible for third parties to know how realistic my financial statements are, so the SEC has mandated I'm on the hook when I write them.
bhousel 15y ago
It's very common.. Investment decisions are often made based on things that representatives from a company say to the press, or details reported in their public SEC filings. Any inaccuracies in these statements can be the basis for a lawsuit. Lawsuits are basically part of the cost of doing business nowadays.

Investors sue? Really? So basically, I want to drink the koolaid but god damn you if it makes me sick... You should not be allowed to sue as a method to correct your own stupidity.

jerf 15y ago

In general, I'd agree. However, many previous articles on HN have been about how Groupon has engaged in some shady accounting practices to get to where it is. It may be enough to make this exceptional enough that the investors have some "real" (for suitable definitions) grounds for complaint.

jetti 15y ago

It appears that the reason they are suing is because the 4th quarter results were posted and then based on that information people bought up the stock and then Groupon came back and said "Ya...about that information. We made a mistake" and the real results were much worse than they originally said, which makes the stock price drop. I think it is a valid approach because a company should be able to get its own accounting correct. However, based on the creative accounting from Groupon (and other issues) I'm really surprised the FTC allowed them to have an IPO to begin with.

run4yourlives 15y ago
Groupon's claims were so outlandish that a layman could have figured they weren't up to snuff. At some point, personal responsibility for your own investments is part of the risk.
- ceejayoz 15y ago
  > Groupon's claims were so outlandish that a layman could have figured they weren't up to snuff. If that's the case, it's pretty clear-cut fraud, which supports the lawsuit argument even more.

zecho 15y ago

I think in this case it makes sense. Groupon restated a sharp drop in their reported revenues over three years. People don't necessarily invest in things they think are particularly good business models. They invest in things that are undervalued. If you looked at the revenue/price and thought it was undervalued and then Groupon changed 3 years worth of data on your after you made a stock purchase, you'd sue too. Just look at these reductions. They're more than just a minor correction from Groupon: - For 2008, revenue was reduced to $5,000, from $94,000. - For 2009, revenue was reduced to $14.54 million, from $30.47 million. - For 2010, revenue was reduced to $312.9 million, from $713.4 million.

run4yourlives 15y ago
People don't necessarily invest in things they think are particularly good business models. If you can't figure out the business model generating the reported millions, it's your own fault for thinking those millions are undervalued. How many of these investors didn't actually care about the value of the stock, so long as there was somebody around tomorrow that would buy it for more? Sorry, but I have no sympathy when you willingly play the game and then get burned by the same things you intended to inflict on someone else.
- ceejayoz 15y ago
  > If you can't figure out the business model generating the reported millions... How, exactly, would I figure out that Groupon was lying/mistaken in their financials?
- prodigal_erik 15y ago
  I'm not entitled to lie to investors just because they should be smart enough to disbelieve me. There's a point beyond which it's not feasible for third parties to know how realistic my financial statements are, so the SEC has mandated I'm on the hook when I write them.

bhousel 15y ago

It's very common.. Investment decisions are often made based on things that representatives from a company say to the press, or details reported in their public SEC filings. Any inaccuracies in these statements can be the basis for a lawsuit. Lawsuits are basically part of the cost of doing business nowadays.